FRA Predicts Further Growth In Demand For Canadian Forestry Products
Submitted by: I-Newswire
2011-10-26 01:28:51
Seattle (OPENPRESS) October 24, 2011 - As increased timber sales in Asia have been identified as the reason for the recovery of a British Columbian forestry firm, Forestry Research Associates (FRA) predicts further growth in demand for forestry products.
Western Forest Products, which runs several sawmills on Vancouver Island, said that two years ago it was shutting down its mills. Now, it has announced a $200 million profit after seven consecutive profitable quarters, which FRA agrees is down to Asian demand.
In 2009 the BC forestry industry was on its last legs as a result of the massive slowdown in US housing construction, which has traditionally provided the largest market for Canadian timber. However, in the past year or so, economic growth in Asia has led to enormous growth in the market for raw materials and Canada has become the go-to place for Asia.
FRA analyst, Peter Collins, explained, "High taxes on Russian timber have meant that China's previous favorite timber provider is no longer as attractive. As a result, Canada has become the top source of timber for the growing Chinese market. Within a year or so, China is expected to take over form the US as Canadian forestry's largest customer."
Western Forest Products' experience is typical in that it expects to ship some 21 shiploads of timber to Asia this year, up from just eight last year.
The firm has been able to reopen seven of its closed sawmills in the past year and is planning to use its cash reserves to expand and revitalise the firm. Speaking at an industry conference attended by Canadian premier Christy Clark, Western's Vice Chairman, Lee Doney, said, "It's not a sunset industry in British Columbia any more, there's a great sunrise."
The higher demand in Asia has meant that investing in forestry in general is an attractive prospect, with projects in Brazil, such as the plantations run by Greenwood Management, and others all over the world, benefitting from the appetite in India and China for raw materials.
